Internet Sales Tax law

[Snaggletooth]

What's the latest on passing this internet sales tax law? I think it is virtually certain, only question is "When?"

I think there is an exemption for small firms, but I don't know they can claim exemption if they rely on E-Bay
and PayPal for a payment vehicle.

[DexEA]

Not sure where it's at, but as far as the exemption, if a business has online sales less than $1 million they would be exempt, and from my understanding that Million is online sales only so what you sell from your store front would not be included. If correct I don't think ebay or paypal will have an impact on a particular business, as the total on-line sales of each business will be looked at seperately. Or maybe I'm misunderstanding?

[Golden Rocket]

Payment Vehicles

Even though conduit vehicles such as E-Bay are technically not the vendor, if they can make the law stick against the vehicles, they will suck in a huge amount of revenue. If vendors under $1MM are exempt, but continue to insist on third party arrangements with PayPal, VISA, etc. the law will leave more money on the table than they collect.

[jimmcg]

Passed by Senate but faces tough road in House. House will at a minimum want to raise the exemption level significantly above the Senate level of one million. Don't look for any speedy resolution. In the end the special interest lobby groups will prevail.

[jimmcg]

Fortune Magazine

Interesting article in the June 10 issue of Fortune which is very relevant to this discusion.

[DaveO]

Once the on-line vendor has exposed their sales into a state with a $ amount attached how long before the state will want an income tax return filed? Filing a slew of state income tax returns along with the sales tax will pretty well destroy all but the biggest on-line vendors.

Some years ago I looked at an long haul trucker's situation. He had taken the federal fuel tax credit for his reefer fuel for years. Some consultant convinced him he was due refunds from the states he drove through as well and filed all the individual state tax credit returns (for a % of course). He got the refunds just fine, along with requests from New Jersey and Virginia for his income tax returns for the years in question.

[Traveling EA]

Trucking vs sales tax

[QUOTE=DaveO;154279]Once the on-line vendor has exposed their sales into a state with a $ amount attached how long before the state will want an income tax return filed? Filing a slew of state income tax returns along with the sales tax will pretty well destroy all but the biggest on-line vendors.

Some years ago I looked at an long haul trucker's situation. He had taken the federal fuel tax credit for his reefer fuel for years. Some consultant convinced him he was due refunds from the states he drove through as well and filed all the individual state tax credit returns (for a % of course). He got the refunds just fine, along with requests from New Jersey and Virginia for his income tax returns for the years in question

I think this is comparing apples and oranges. The internet sales tax is designed to collect revenue from residents of their states who do not pay use tax on their returns. There is an apportionment for truckers who actually drive through the states. The apportionment for most states is the the number of vehicle miles driven in that state. At one time I worked for a CPA firm who had a national trucking company as a client. The client had to file in each state they drove through. They had an actual physical presence in each state. The sales from an internet sales company does not have physical presence in the state.